Article preview from IN VIVO - January, 2012
Is US-style innovation in the medical device industry heading towards extinction? Gone are the days when companies believed they could build robust businesses by serving largely, if not exclusively, the US market. Today, emerging markets have become growth markets. But those markets, and even a post-health care reform US, challenge an innovation model that used to reward even incremental technology enhancements with premium pricing, by a price-insensitive customer.
Article preview from IN VIVO - January, 2012
By virtually any measure, the US medical device sector should be the pride of American industry. Is there any other industry with products of global importance and application that is so thoroughly dominated by companies headquartered in the US? In comparison, look at pharmaceuticals, medtech’s sister industry: a list of the top 20-25 biopharma companies would show a healthy mix of US, European and even Japanese companies. Not so the medical device industry where in virtually every category - cardiovascular, orthopedics, wound care, you name it - the top companies all are based in the US.
US dominance is just as great at the investment end of the scale: the US share of venture dollars going into start-up device companies dwarfs that of any other region, even considering Europe as a whole. Yet, over the past couple of years, US device industry executives have begun to worry about the future of the industry, asking whether the US isn’t losing its edge, if not in terms of the worldwide sales of devices from US-based companies, at least in the ability of US companies to continue to lead in producing innovative technology.
The debate over the kind of climate the US provides for innovation embraces several of the stories that make up the top stories of 2011. First, industry executives are loudly voicing concerns that a more difficult regulatory process – and specifically the reform of the 510(k) process – would make it difficult for US companies to bring novel and important technologies to market here.
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